According to GamesIndustry.biz (registration required), the latest S-1 filing from Zynga has fixed the share prices for its upcoming IPO at $8.50 to $10 per share and is offering 100 million shares of its Class A common stock starting December 16. It was also revealed that Mark Pincus would not be selling any of his shares.
Original estimates for the Zynga value stood at $20 billion, but these share prices would give the company a value of between $7 billion and $9 billion.
Analysis: Love them or hate them, $7-9 billion value isn’t shabby for a social games site’s upcoming IPO, even if the original estimates were much higher. Still, they have a lot to address before stocks go on sale, as recent reports from Cowen & Company have shown no growth in Daily Active Users (DAUs) since October 2009 despite the slew of games released. DAU totals actually went down a few million from June to October 2011. The suggestion has been made that the membership base for Zynga’s new games are just made up of players of their older titles, meaning that they could be having trouble drawing new players in. If that’s the case, Zynga’s stocks could be in trouble despite a relatively strong initial offering.
Another thing to keep in mind is Zynga’s rivals. Most other social gaming companies can’t hold a candle to Zynga’s numbers, but EA does have a strong following for The Sims Social. EA will no doubt continue to release games and updates for those games, and if Zynga can’t keep their products fresh, they may lose players to EA. It’s going to be an interesting next couple of months for Zynga, that’s for sure.